SEA currencies to gain against SGD in 2013

Singapore’s dollar will underperform most regional counterparts this year as a pickup in the global economy and faster growth among its peers reduces demand for the republic’s top-rated securities, according to HSBC Global Asset Management and Mizuho Asset Management Co.

Interest in the slowest-growing nation of Southeast Asia’s five-biggest economies will diminish in 2013 as returns waver, Gordon Rodrigues, investment director at HSBC Global Asset in Hong Kong, said in a Jan. 14 interview. Prime Minister Lee Hsien Loong said on Dec. 31 that the $240 billion economy will expand 1 percent to 3 percent this year, less than the past decade’s 6 percent average.

Gross domestic product in the Philippines, Thailand and Malaysia may rise at almost double the pace of Singapore in 2013, official forecasts show, where 10-year bonds offer yields that are more than twice those in the city-state. The baht, ringgit and peso are among the best-performing currencies in Asia this year, as the U.S. fiscal agreement and Europe’s easing debt crisis, bolstered demand. Singapore’s dollar has weakened.

“From a point of view of potential in the region, other currencies have potential for more appreciation,” said Rodrigues, whose company oversees $32 billion of Asian fixed income. “If the market is in a risk-taking mode, given the low- growth outlook for the Singapore economy, there’ll be less interest in money flowing to Singapore.”


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